Russia starts voluntary dairy product traceability

Last week, Russia’s wide-ranging track-and-trace scheme – Chestny ZNAK – was extended to include dairy products, but initially only on a voluntary basis.

Eventually dairy product producers will have to add unique codes in order to sell in Russia, but as of January 20  they can add codes – free of charge – in a move intended to encourage early participation before it becomes obligatory on in June.

The labels are based on serialised 2D barcodes incorporating crypto codes for added security, as well as secure reporting and records management via a centralised database, to protect consumers by keeping fake and substandard products out of the market.

Russia’s plan is eventually to make every single consumer good traded in the domestic market – including imported goods – digitally traceable at the unit level. It wants goods to be trackable and verifiable as they make their way down the supply chain from the point of manufacture to the consumer.

Russia started rolling out the Chestny ZNAK system in 2019 for medicines, and it has set an objective of expanding it to a broad range of goods by 2024, allowing consumers to check products they purchase by scanning codes using a smartphone.

The system is considered to be fairly demanding for manufacturers to implement, so the Russian authorities have generally allowed a soft launch, with a voluntary period to allow time to road test systems.

Commenting on the latest development, the head of the dairy section at the CRPT body that issues the crypto codes – Aleksey Sidorov – said that experience to date shows that the codes can be added to products without changing the performance of production lines or resulting in more scrap product. He also said the codes can generally be read as quickly as a regular barcode.

One producer –the Kirov-based Bogorodsky cooperative dairy – says it is almost ready to implement the codes, having road tested a way to fix the labels to existing packaging film using thermal transfer printing. It took just three months to order and integrate the required machinery to print the codes and get the print management system in place.

The situation for dairy is a little different to other product categories because it has to link to another government database – called Mercury – that is used to certify and track livestock and animal-derived products from farms to processing plants.

It’s worth noting that currently only Russian legal entities can purchase codes directly from CRPT, so importers that don’t have domestic subsidiaries in the country will need to work with a Russian distributor or logistics service provider.

Research has suggested that Chestny ZNAK could add as much as 1.2 per cent to the country's GDP by reducing illicit trade and counterfeiting, increasing tax revenues, and improving government oversight of the economy, according to a World Economic Forum report.

More than 11 million counterfeit goods were seized in Russia in 2019, according to the customs service.